Fashion retailer H&M has announced it is to test a subscription-based rental clothing service in China as part of its drive to find new circular business models.

The test, which will run for three months, is a collaboration between H&M’s innovation department The Laboratory, its COS brand and the Chinese subscription rental company YCloset.

With rental tipped to capture two per cent of the retail landscape within 10 years, according to the 2019 'thredUP' report, H&M sees it as a growing business model, especially in China.

Laura Coppen, circular and sustainable business development spokeswoman at The Laboratory, said: “Subscription rental has been on our radar for some time and we feel this is a very relevant model for us to explore.

"With our learn by doing approach, we will test subscription rental in China and iterate on learnings as we go. This will allow us to explore customer demand, the business model, potential to scale and different sustainability factors.”

YCloset is Chinas largest fashion rental platform with 15 million registered users. H&M says the test will enable it to learn more about its customers and the customer demographics.

Coppen added: “We were inspired by YCloset’s eco cleaning facility and their shared vision of sustainability. Cleaning and logistics are critical factors with the rental business, as this is where the environmental impact is high.

"YCloset’s water recycling and investments in greenfield technology, are in line with what we expect from a collaborative partner.”

The rental subscription service has an additional sustainable aspect to it, as customers will be able to buy the product for a reduced price when the rental period is over.

COS managing director Marie Honda said: "We believe the quality of our collections will lend themselves well to the rental system. More broadly it is important for us to try new approaches - testing and collaborating to achieve the best outcome for our customer and community - as well as the future of our business.”

H&M recently announced its first foray into clothing rental with plans to launch a service at a flagship store in Stockholm when it reopens after a major refurbishment.

Courtesy: Eco Textile News